Ehrenreich v Kwong
[2002] VSC 477
•12 November 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 9471 of 1990
| MARTIN EHRENREICH and LISETTA EHRENREICH | Plaintiffs |
| v | |
| FRANCIS KWONG and SHIRLEY KWONG | Defendants |
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JUDGE: | Balmford J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 29 October 2002 | |
DATE OF JUDGMENT: | 12 November 2002 | |
CASE MAY BE CITED AS: | Ehrenreich v Kwong | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 477 | |
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PRACTICE – Execution – Leave to issue execution when more than 6 years elapsed since judgment – Supreme Court Rule 68.02
Supreme Court (General Civil Procedure) Rules 1996 – Rule 68.02
Solic v Bertossa [1969] VR 594
Dennehy v Reasonable Endeavours Pty Ltd [2001] VSC 447
The Gramophone Company Limited v Leo Feist Incorporated (1928) 41 CLR 1
James v Federal Commissioner of Taxation (1955) 93 CLR 631
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr M J Corrigan | Jerrard and Stuk Lawyers |
| For the Secondnamed Defendant | Mr S W Stuckey | Lawcorp Lawyers |
HER HONOUR:
This is an appeal from an order of Master Wheeler made on 24 September 2002 in the following terms:
1.the Plaintiffs have leave to issue a warrant of execution notwithstanding 6 years has elapsed since judgment took effect.
2.The Secondnamed Defendant pay the Plaintiffs’ costs.
By virtue of Rule 77.05(7) of the Supreme Court (General Civil Procedure) Rules 1996 (“the Rules”) the appeal is by re-hearing de novo of the application to the Master, which was brought by summons on 19 July 2002.
That application was brought pursuant to Rule 68.02 of the Rules, which reads, so far as relevant:
68.02Leave to issue warrant
(1)Notwithstanding Order 66, a warrant of execution to enforce a judgment shall not be issued without the leave of the Court in the following cases -
(a)where six years have elapsed since the judgment took effect;
.. .
(4)The application shall be supported by evidence on affidavit showing -
(a)where the judgment is for the payment of money, the amount, including any interest, due on the date of the application;
(b)where paragraph (1)(a) applies, the reasons for the delay;
.. .
(e)that the applicant is entitled to proceed to execution on the judgment; and
(f)that the person against whom execution is sought is liable to execution on the judgment.
On 23 October 1990, that is, over twelve years ago, Master Wheeler pronounced judgment in favour of the plaintiffs against the defendants in the sum of $124,309.20 together with costs. A warrant of seizure and sale was issued on 22 November 1990, but was not executed as the defendants could not be located. The events which followed are set out at [10] and following below.
On or about 6 September 2001 the plaintiffs received a communication relating to the debt, apparently deriving from a person engaged in the business of debt collection. They then instructed their solicitors to make enquiries about the whereabouts of the defendants. It was ascertained that the defendants had been the registered joint proprietors of the property known as 21 Fairview Street Hawthorn since 7 November 1996, and that they resided at that address. Following those enquiries a letter of demand was sent to the defendants on 13 November 2001 at that address.
Mr Corrigan, for the plaintiffs, relied on the judgment of Menhennitt J in Solic v Bertossa[1] , dealing with Rule 23 of Order 42, as it then stood. That Rule relevantly read:
[1][1969] VR 594
23.Execution by leave of Court.¾In the following cases, viz.:¾
(a)After six years or change of parties.¾Where six years have elapsed since the judgment . . .
the party alleging himself to be entitled to execution may apply on summons for leave to issue execution accordingly. And the Judge may, if satisfied that the party so applying is entitled to issue execution, make an order to that effect, or may order that any issue or question necessary to determine the rights of the parties shall be tried in any of the ways in which any question in an action may be tried. And in either case the Judge may impose such terms, as to costs or otherwise, as shall be just.
There was no provision in that Rule corresponding to the present Rule 68.02(4).
Menhennitt J said [2] :
The conclusion I have reached is that on summons under O.42, r23, all that is involved is an inquiry by the judge as to whether or not the party applying is entitled to issue execution. . . .
And, after consideration of the authorities which led him to that conclusion:
It is basic to what I have decided that the only matter the rule mentions is that the judge "if satisfied that the party so applying is entitled to issue execution" may make an order to that effect and the expressio unius est exclusio alterius rule leads to the conclusion that that matter is the only relevant matter to be taken into consideration.
[2]at 595
It is not in issue that the judgment is still in force and that the amount of $428.43 [3] is all that has been paid. The affidavits of the firstnamed plaintiff include the evidence required by paragraphs (a), (b), (e) and (f) of Rule 68.02(4). Accordingly, the plaintiffs are entitled to issue execution. That being so, Mr Corrigan submitted, the decision of the Master was correct, and the appeal should be dismissed.
[3]see [10] below
Both counsel referred to the decision of Pagone J in Dennehy v Reasonable Endeavours Pty Ltd[4] in which His Honour considered the effect of the Rule in its present form. As to Rule 68.02(4)(b), His Honour said [5] :
R68.02(4)(b) requires the plaintiff to support its application by an affidavit showing the reasons for the delay. The defendant maintains that the plaintiff has failed to explain the delay in seeking to enforce the judgment. I do not agree. The purpose of the requirement is to put the Court in the position of being able to assess whether it should grant the leave being sought. Delay due to abandonment of rights or indifference to them would tend against the grant of leave. The purpose of the requirement is not simply for a tardy judgment creditor to be embarrassed by a statement of the delay. A mere statement of inactivity might amount to a statement of delay, and on one view of the word “reasons” such a statement might even be said to show the reasons for the delay. The plaintiff seeking leave needs to show reasons for the delay which, as the Rule states, supports the application.
[4][2001] VSC 447
[5]at [11]
I would, with respect, adopt that passage. The enactment of Rule 68.02(4)(b) can only be intended to enable the Court to take into account the reasons for the delay in determining whether it should grant the leave which is sought. I now turn to consider the events which occurred after the judgment, and the reasons for the delay, as appearing from the affidavit of the firstnamed plaintiff.
In June 1991 the plaintiffs ascertained that the defendants had left the jurisdiction to live in Malaysia. In January 1992 the plaintiffs were informed of the address of the employer in Malaysia of the secondnamed defendant (“Mr Kwong”). In April 1992 they enquired of Malaysian solicitors the cost of investigating whether the defendants had assets and of registering judgment and enforcement in Malaysia. They were advised in June 1992 that the costs would amount to about 7,500 Malaysian ringgits, which would amount to just under $A4,000. On 21 October 1992, they were further advised that Mr Kwong had entered into a scheme of arrangement pursuant to part 10 of the Bankruptcy Act 1966. Pursuant to that scheme of arrangement the plaintiffs received $428.43.
The firstnamed plaintiff deposes that after receiving the advice on costs the plaintiffs “did not believe that it was commercially viable to continue to pursue recovery of the judgment in a foreign jurisdiction and were not prepared to continue to expend large sums of money with such an unlikely prospect of recovery” and that “In early 1993, as a result of time, cost and emotional considerations, the plaintiffs resolved not to actively pursue the judgment for the time being. The plaintiffs assumed that the financial position of the second defendant was likely to be as poor as that of the first defendant, a belief compounded by the fact that the first and second defendants were in Malaysia at the time”.
The secondnamed defendant (“Mrs Kwong”) deposes that she returned to Melbourne in January 1997 and has since resided in the house at 21 Fairview Street, which she owns jointly with her husband, Mr Kwong, and which is her only asset. She exhibits a copy of a declaration of trust said to have been executed in Malaysia on 31 October 1996, asserting that she holds her interest in that house on trust for Mr Kwong. She applied for a credit card, and notified both state and federal electoral offices of her address at 21 Fairview Street.
Mrs Kwong deposes further that she has been prejudiced by the delay in enforcing the judgment, in that she had allowed herself to be recorded as a registered proprietor of 21 Fairview Street, entered into a contract to effect building works at that property, and obtained credit card facilities. I note that the date on which she became a registered proprietor was only six years and two weeks after the date of the judgment. In any case, as the Master pointed out, if she has, as she claims, no beneficial interest in the land, that should not be a matter of concern to her. I am not clear as to the perceived relevance of the credit card facilities.
Having considered the matter, I am satisfied that the reasons given by the firstnamed plaintiff provide adequate justification for the delay in proceeding to execution. No doubt the plaintiffs could, as Mr Stuckey submitted, have discovered the whereabouts of the defendants by making periodical title searches, or searches of the records of ASIC. However, the fact that they did not do so does not justify denying them the right to execution. It is for the debtor to seek out the creditor and not vice versa [6] . They had already made the reasonable commercial decision described in [11] above, and in refraining from making such searches they were acting consistently with that decision.
[6]See The Gramophone Company Limited v Leo Feist Incorporated (1928) 41 CLR 1 at 24 per Isaacs J; James v Federal Commissioner of Taxation (1955) 93 CLR 631 at 639 per Williams, Kitto and Taylor JJ.
Accordingly I consider it appropriate that the plaintiffs be entitled to a warrant of execution. The appeal from the Master is dismissed.
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